Indonesia’s government has a plan to lower gas prices for industrial customers, including steel mills, in March this year to support local producers’ competitiveness, according to the statement issued by Indonesian energy and mineral resources minister Arifin Tasrif late last week.
The gas prices for Indonesian industries are from $8/million BTU to $9/million BTU at the moment and are expected to decline to $6/million BTU following the expected steps by the cabinet of Indonesian president Joko Widodo to increase the supply of gas to the local market.
High gas prices have been among the major reasons for the high costs of steel production in Indonesia and the low capacity utilization of producers. Such Indonesian BF-based producers as PT Krakatau Steel, PT Krakatau POSCO and the newcomer PT Dexin Steel will be among the beneficiaries.